#365: An apple-a-day keeps the competition away?
Research from various sources, including Bain & Company, Harvard Business Review, and Gartner, suggests that acquiring a new customer can cost anywhere from 5 to 25 times more than retaining clients
How many of you remember the old wives' tale, "An apple a day keeps the doctor away"? I'm sure this has still been passed on to generations and will be for a long time. Why? It is a simple strategy that may work, easy to implement, and even if you're wrong, it doesn't hurt.
My first outside sales position was a rigorous one. I was given the keys to a Chevy Celebrity, a Roadmap, and an account list of 200+ customers spanning 22 States. Good luck, see you at the end of the year, was all my sales manager could muster out of his mouth at the time.
The territory had been underperforming. Management didn't want to pour much money into advertising or other marketing then. I only knew that these 200+ customers were not sticking around. The retention rate average was less than 50% per year! That means that to stay at the same sales level year after year, I needed to double the number of customers yearly! Or, I needed to retain the ones that I was losing.
22 states
200+ customers
Only 240 working days in a year
You may not remember or be too young to realize, but this era was before Al Gore invented the Internet, cell phones were a luxury, and low-cost airlines had not entirely surfaced. How was I going to maintain these customers? Most of these customers were starving for attention!
Oh yeah, what does this information have to do with an apple a day?
My Aha Moment
While driving from Cincinnati to St Louis, I grabbed an apple and started eating away. I devised a rhyme somewhere West of Louisville and East of Salem, IL. If an apple a day could keep doctors away, what would keep my competitors at bay? In that moment of lucidness, I brainstormed with myself. I decided that I needed to connect with every customer more often. How often? Every three months would be a great goal. I did the quick math, developed a 5-a-day keeps the competitors away strategy, and started the next day.
My morning routine had begun, five days a week, from whatever hotel room I was in. I focused on calling five customers daily before getting in the car. Again, this was before cell phones and when customers had desk phones. Better yet, they had secretaries I could obtain company information before they put me through to my contact. When I got through the list, I would start all over again.
These phone calls would lead to more formal meetings and presentations. My discussions with the secretaries led me to new contacts and deepened my reach within the organizations. Over time, I connected with these customers and learned more about them. As the connection grew, we began to trust one another, and the customers started telling me what issues they were having, problems they had, and ideas for the future. At the end of my first year, my retention rate soared to 80%. By the end of the 2nd year, I had it at 93% and added quite a few pieces of business. This helped me become Sales Person of the Year, which I would repeat 2 years later using the same formula.
These contacts were more than just a simple hello. They were connections. I focused on building a relationship with these people. They understood I couldn't drive to Portland, Maine, from Detroit and were happy that I was sincerely trying to learn about their business through these conversations. I went from salesman to strategic partner, developing healthy relationships and keeping my competitors away.
Leaders, how can you use this strategy?
As a leader, you send out turkeys to your employees on Thanksgiving or Hams at Christmas, but you are not connecting. Get to know your internal and external customers intimately. Focus on connecting with them, learning something about them, and checking back when you hear they encounter problems.
There are numerous stories of CEOs writing thank you notes or anniversary letters to all their employees. It doesn’t matter how large you are; it can be done if you break it down. You don’t eat an elephant all at once; you do it one bite at a time.
What would your five-a-day strategy look like?
Great insight Mike